The S&P 500 closed the week on a high note and again seems poised to challenge its 200 day moving average (currently 1272.27), which has provided resistance twice in recent weeks as a full fledged equity rally has fallen short on both occasions. [S&P 500 ETFs Testing 200-Day Average]

Not surprisingly, broad based equity large cap oriented ETFs were active with creations this week, with SPDR S&P 500 ETF (NYSEArca: SPY) taking in nearly $2 billion in new assets. Technology continues to exhibit stronger technical performance than the S&P 500, as the Nasdaq-100 PowerShares QQQ (NsdaqGM: QQQ) continues to trade above its 200 day moving average line despite testing this level on multiple occasions recently — largely on weakness in Apple (NasdaqGS: AAPL) — and the ETF saw inflows this week as well, to the tune of about $800 million.

SPDR Dow Jones Industrial Average (NYSEArca: DIA) was another large cap product that saw net inflows, with over $400 million entering the fund.

We had explained what seemed like a migration from large cap ETFs into small cap ETFs such as iShares Russell 2000 (NYSEArca: IWM) on a few instances going back to the equity market weakness in early October, and this week from a creation/redemption standpoint, we noted activity on the opposite end of this. IWM led all ETFs in outflows, and based on the large cap creation activity that we pointed out above, it is possible that those who had made small cap bets over large cap at substantially lower levels in the market (SPX was in the 1074-1100 range at the time), are at least partially cashing out of these positions and shifting back into large caps perhaps before year’s end.

With the Russell 2000 Index outpacing the S&P 500 Index handily over the past month (up 6.54% vs 5.11%), and noting the performance gap (small caps were notably lagging large caps) that we pointed out originally when we saw large inflows into Russell 2000 products such as IWM in early October, it is entirely feasible that institutional investors are starting to unwind as least a portion of this trade.

In other activity outside of equities, we saw near term December upside call buying in both SPDR Gold Shares (NYSEArca: GLD) and iShares Silver Trust (NYSEArca: SLV) options on weakness in the underlying metals.

Both metals weakened after Monday of last week before catching a bid again finally on Friday, and it seems evident that institutional flows are playing for a resumption of upside, not only in the activity in call options that we point out but also in the fact that GLD saw about $1.5 billion flow into the fund last week.